Section 1

ASSETS AND THE LAW

A. Assets That Do Not Require Court Intervention
B. Assets That Require Court Intervention
C. Small Estate Proceeding

Property left behind by the individual who has died (whom the law calls a "decedent") falls into one of two general categories: assets that require court intervention, and those that do not. Since those that do not are simpler, we will start with those.


A. Assets That Do Not Require Court Intervention

Three categories of assets can generally be liquidated without any court intervention: assets that were held jointly, assets that name a specific beneficiary and assets held by a Trust. Assets held jointly by the decedent and another individual generally can be liquidated with just proof of death. These assets may be titled as "joint tenants" or "joint tenants with right of survivorship." In general, liquidation of these assets does not require Court approval.

However, New York law recognizes that joint control does not always mean joint ownership. The decedent may not have intended to create a joint account with another individual; perhaps the joint control was only a "convenience account" (i. e., to allow the other person to sign checks or make withdrawals - but not to make them a co-owner).

The assets of a "convenience account" are distributed according to the terms of the decedent's Will (see the Probate section starting on page 8); if the decedent left no Will, those assets would pass according to New York State's laws of intestacy (see the Intestacy section starting on page 5). Either the co-owner may acknowledge or the Court may determine that assets are not in actuality jointly owned assets.

Assets naming a specific beneficiary may be liquidated with only proof of death. Such assets may have been left "in trust for" or "payable on death" to a designated beneficiary and commonly include bank accounts, Individual Retirement Accounts and insurance policies. In exceptional cases - for example, if somebody disputes who was designated or whether the designated individual is really entitled to the asset - Court intervention may be necessary.

Additionally if the decedent created a Trust (sometimes referred to as a "Living" or "Revocable" Trust) and assets were retitled in the name of the Trust (i.e. the Trust was "funded") during the decedent's lifetime, those assets will pass in accordance with the terms of the Trust without Court intervention.

Certain assets, such as cars and jewelry are, subject to certain dollar value limitations, deemed the property of the spouse or children of the decedent. They pass automatically to those individuals in the absence of a provision to the contrary in the decedent's Last Will and Testament.

Although no Court proceeding is typically required in any of the above situations, most of these assets will be subject to New York State and, if applicable, Federal estate taxes subject to the exemption amounts for those taxes (see Section 6B below entitled "Estate Taxes" beginning on page 17).


B. Assets That Require Court Intervention

Assets held in the sole name of the decedent may not be liquidated, redeemed or transferred without the appointment of a legal representative (an Executor or Administrator) by the Surrogate's Court. This is so even if the decedent left a Will. The Will must also be approved by the Surrogate's Court in the context of a probate proceeding (discussed in Section 3 below starting on page 8). If the decedent died without leaving a Will, an Administrator for the estate must be appointed by the Surrogate's Court in the context of an Administration proceeding (discussed in Section 2 below starting on page 5).

C. Small Estate Proceeding

If the decedent's solely-owned assets are less than $30,000, a simplified "small estate" proceeding can be utilized to settle the estate. In this situation, the Surrogate's Court (in the County where the decedent died) appoints a Voluntary Administrator. This simplified proceeding can typically be handled without an attorney and can be used whether or not the decedent left a Will.

Table of Contents
NEXT: Section 2 - INTESTACY: When a Person Dies Without a Will

Howard Garfinkel, Esq.

Lauterbach Garfinkel Damast & Hollander, LLP
49 North Airmont Road, Suite 101
Suffern, New York 10901
845-368-4400 - Office
howardg@lgdhlaw.com